Technology Alternatives to the Third-Party Cookie
While customers might be hesitant at first to share personal data, they will be more willing to share it as their relationships with companies mature, Campbell says. And the more information customers share, the better companies will be able to serve them, improving not only the immediate customer experience but also longer-term customer retention.
For such a strategy to be successful, companies need good data management systems, says Bruce Biegel, senior managing partner at analyst firm the Winterberry Group.
“There are multiple new approaches for collecting customer data,” Biegel says. “There’s an increase in contextual targeting and advertising.”
Biegel likens the change in marketing strategy to what retailers had to do at the onset of the COVID-19 pandemic: They had to shift strategies to focus more on digital and e-commerce. Marketers need to be more focused on first-party data strategies, he adds.
While some marketers are starting to follow this strategy, there is still a “fairly large portion” waiting for a “savior solution” to replace third-party cookies, Campbell laments, while advising against this strategy.
“Look at your customer base, determine those who are most likely to buy, then throw out a small net with targeted strategies,” he suggests. He recommends that marketers look at search engine optimization, content syndication, and other efforts to build demand-generation efforts.
“A lot of companies will make a mad dash to replace cookies for demand-generation efforts,” Campbell says. “They will see a big dip in the front end of the sales funnel as a result.”
Marketers who haven’t already done so should start developing and implementing strategies now to not only be ready for the sunsetting of third-party cookies but also to enhance current marketing efforts, Poulsen emphasizes. “Invest in a first-party relationship strategy.”
Daghir recommends testing alternative customer information-gathering and marketing strategies as soon as possible.
BUILDING TRUST AND TRANSPARENCY
With more reliance on first-party and zero-party data, it will be more important for marketers to establish trust and transparency with customers. OneTrust PreferenceChoice, a provider of customer consent and preference management software, found that 79 percent of consumers would be willing to share data if there was a clear benefit to them, and four in five would be more likely to purchase from companies they believe protect their personal information. However, only 28 percent of consumers have any idea about which companies best protect their personal information.
To build trust and transparency, OneTrust PreferenceChoice officials recommend the following:
• Enable users to go beyond what the organization needs to offer just to comply with privacy laws.
• Have an opt-down, not opt-out strategy. By presenting multiple “opt-down” options, organizations can reduce their unsubscribe rates.
• Show custom preferences and profile data so customers have an easy way to choose their channel preferences.
• Monitor engagement insights and analytics for opt-in and unsubscribe rates.
• And capture and centralize all customer consents and preferences and ensure they sync with other customer communication technologies.
These are important strategies not only for building trust and transparency, but also for complying with privacy laws like the GDPR and the California Consumer Privacy Act (CCPA).
CCPA regulations are based on an opt-out mechanism instead of an opt-in one. Thus, websites can load cookies but are obliged to provide users with an easy way of opting out of them at any moment. They must also inform consumers before or at the point of collection.
Violations of privacy directives can be extremely costly. In December, CNIL, France’s data protection agency, fined Google $120 million and Amazon $42 million for using tracking cookies without consent, which is required under the GDPR.
Marketers need to not only keep abreast of the current rules but also of the changes to the laws, Biegel cautions. GDPR has been revised twice in the 18 months since it was enacted.
“Regulators haven’t figured everything out yet,” he says. As regulators further refine privacy laws, marketers will need to keep pace.
“Privacy needs to be ingrained in organizational culture to function effectively,” says Scott Sullivan, chief revenue officer at Adswerve. “This can seem overwhelming with the onslaught of new privacy regulations and laws being passed, but it’s not impossible. My advice right now is to not take a wait-and-see approach. Be proactive in your privacy efforts. It’s not just in the interest of avoiding fines but in future-proofing your customer acquisition model.”
He further recommends that companies take a “clean room” approach and centralize all data. “Marketing organizations need to gain control of their data and mitigate risk to their brand and consumers. Integrating analytics and media functions under one roof isn’t just an efficiency play. Keeping a tight lid on your data operation is critical to protecting brand reputation. It also means accessing all data in ways that respect user privacy.”
Companies that work with other parties need to be careful about what information they share with subcontractors and how subcontractors will use that data, Campbell adds. “You need to check the laws in your particular jurisdiction. You can’t claim ignorance of the law.”
Experts agree that the sooner marketers who haven’t already done so move away from third-party cookies, the better, with the knowledge that other strategies, if implemented properly, should produce longer-lasting benefits. But in doing so, they will also need to pay close attention to current and evolving privacy laws while pursuing strategies that don’t involve third-party cookies.
Phillip Britt is a freelance writer based in the Chicago area. He can be reached at firstname.lastname@example.org.